Trump could light a fire to move the Gordie Howe Bridge project forward

A bridge not far enough? Repairing roads and bridges comes with pros and cons

By Kathy Hoekstra – Watchdog.org – – Monday, January 9, 2017

A few months ago, a Detroit Free Press headline asked, “Will the Gordie Howe bridgeever get built?”

It’s a fair question for the $2 billion, publicly funded project launched more than a decade ago to relieve growing congestion on the Ambassador Bridge that connects Detroit and Windsor, Ontario.

Planners say construction could begin as soon as mid-2018.

If that’s not soon enough, how about this year? Or this spring?

A transition team adviser for President-electDonald Trump tells Watchdog.org that all it would take is “just a phone call from Trump.”

Norman F. Anderson is president and CEO of CG/LA Infrastructure and an adviser to the Trump “infrastructure task force.” That group is charged with prioritizing and coordinating the president-elect’s ambitious $1 trillion infrastructure program — that is, $137 billion in tax incentives used to lure the remainder from private investment.

Mr. Anderson said the task force already has identified 68 projects across the country that could begin this year — although he did avoid the term “shovel-ready” — for a total investment of $262 billion and the potential for 700,000 jobs.

The bridge would bear the name of the Red Wings immortal near the top of the list. Other examples provided to Watchdog.org are the Plains & Eastern Clean Line transmission project, Dallas-to-Houston high-speed rail, the Southwest Pass dredging project south of New Orleans, the Yakima River basin water pumping station and Veterans Affairs hospital construction.

Whom would Mr. Trump call to push the Gordie Howe International Bridge to the starting line?

Many who have followed the bridge saga would likely agree on billionaire Manuel “Matty” Moroun. He and his family own the 87-year-old Ambassador Bridge, which charges $5 for cars in the U.S. to cross. He has raised some of the biggest roadblocks to a publicly funded bridge that would compete with his family’s $60-million-per-year enterprise.

The latest gambit is a lawsuit claiming Michigan Gov. Rick Snyder, a Republican, is doing an illegal end run around the Legislature to get the bridge built.

Mr. Anderson demurred on the phone call speculation, saying the 2017 projects compiled by the task force all have the same unmistakable impediment to progress.

“All are projects that would be ready to go, simply lack the final approval, permit or push,” he said. “The point is that there are projects, many of them across all sectors, tied up in the soon-to-be former administration’s lack of leadership, willingness to take risks, and indecisiveness. And that’s not a political point. It’s just a fact.”

Mr. Anderson also chided the Obama administration for not having the right infrastructure professionals at the table, which led to misplaced spending.

“The failure of the Obama people to identify good projects and invest in those projects doesn’t logically mean there aren’t good projects; it just means that they sucked at it — radically underestimating the complexity, setting mediocre people to the task of execution and not following through,” Mr. Anderson said.

Veronique de Rugy, a senior research fellow at the free-market-oriented Mercatus Center, is equally critical of President Obama’s infrastructure efforts, especially his signature American Recovery and Reinvestment Act — the $800 billion stimulus package that kicked off his administration.

A 2011 Mercatus paper that Ms. de Rugy co-wrote, “Would More Infrastructure Spending Stimulate the Economy?” challenged the notion that a quick infusion of government money for infrastructure projects instantly creates shovel-ready jobs and jump-starts economic growth.

“President Obama had roughly $47 billion in direct infrastructure spending, and the idea was to invest it into ‘shovel-ready’ projects. And it would take the place of the private sector during the recession,” she explained to Watchdog.org. “And once the economy picked up, the private sector would then come back.”

The federal government’s final report in 2014 shows that $30 billion of that money went to transportation infrastructure, while the bulk of the rest went toward shoring up state and local governments and sudden paperwork-laden grant programs.

“President Obama himself had to acknowledge that there are just not that many ‘shovel-ready’ projects,” Ms. de Rugy said.

Ms. de Rugy said that even though Mr. Trumpaims to encourage more private investment through tax incentives, the plan likely will go down the same unsuccessful path. It’s not the mix of government and private spending, she said. It’s which projects are chosen and why, often a choice based on politics and popularity rather than merit.

A project as high-profile as the Gordie Howe Bridge is a no-brainer for investors, who can expect ribbon-cuttings, outsized press coverage and perhaps a cut of revenue. After all, the Ambassador Bridge pulls in $60 million per year.

But how eager are investors to fix crumbling highways in Detroit that get motorists to the bridge?

“One of the things we may actually need is maintenance. But I don’t think that’s what [Mr. Trump is] going to have in mind — to just do maintenance. It’s not that lucrative for the private sector,” she said. “So I think they’re going to find that the administration’s grand idea is going to be a whole lot of misallocation of capital or that there’s no amount of tax credit that can actually attract the private sector to do some of the stuff that would be useful to do.”

Another pitfall the incoming administration needs to avoid, Ms. de Rugy said, is considering government infrastructure spending a “jobs” program. It is a popular notion, especially among Democrats looking to recapture the votes of American workers who have defected to Mr. Trump.

“If we need to build infrastructure, try to get the highest quality for the lowest price and try to ignore the ‘economic impact’ or the ‘jobs impact,’” she said. “That’s not your reason to do it. It’s because you need it.”

Mr. Anderson blames infrastructure sluggishness on a market shackled by regulations, the “incompetent, slow and sleazy execution of studies” that cause endless delays, and leadership unwilling to challenge the regulatory status quo or revitalize the public sector.

Ms. de Rugy and Mr. Anderson agree, however, that time is of the essence.

“The infrastructure is a very, very bad tool to try to stimulate the economy in the short term,” Ms. de Rugy said. “It has to happen fast. And that’s actually really just hard to put in place.”

The ever-optimistic Trump team thinks not.

Doug Rothwell: Three resolutions for an improving Michigan

By Doug Rothwell

Detroit Free Press guest writer

January represents a time of resolve and optimism. It’s a time to resolve to break bad habits, accomplish new goals, and change things for the better.

This year also brings an opportunity to renew how we look at our state. Big steps have been taken the last few years to revitalize and rebuild Michigan. We have broken many of the bad habits that led to Michigan’s economic challenges by balancing our budgets and stopping the use of accounting gimmicks.

We’ve also taken some major steps to fundamentally make Michigan stronger, like improving Michigan’s tax climate, making government work better and adopting fairer benefits for government workers. While we’re a long way from being a top-10 state for jobs and incomes, we are on our way to building a new Michigan.

What’s needed now is continued resolve and a roadmap for continuing our path toward Michigan’s economic resurgence. Here are a few resolutions for Michigan to consider:

Invest in people: Most of the best-paying jobs require some level of college education, and these demands will rapidly increase in the next decade. Yet, while the need for a college education has gone up, Michigan has made it harder for students to afford to attend by cutting state funding for higher education nearly in half when adjusted for inflation over the past decade.

Right now, we spend 10 times more each year to house a prisoner than to help a student go to college in Michigan. Last year, an important step was taken toward turning this around when more money was allocated to higher education for the first time in a decade. Let’s resolve to take an additional step in 2013.

• Invest in infrastructure: The state has been debating for more than a decade how to provide the funding needed to ensure we have the highways, ports, railroads, bridges and airports that connect us effectively to the places we do business with. If we don’t have the infrastructure needed to ship what we make or serve our customers around the globe, we can’t grow our economy.

International trade opportunities are only going to grow as an economic driver, and Michigan is ideally situated to make the most of this trend. We have unique access to foreign markets and an airport that is poised to be a major global hub in air travel. Our water ports and rail access also make us a natural infrastructure launching point. What we need now is critical investment so we can capitalize on our strategic location to become a premier gateway to the Midwest.

Build on what we have and do more of what we do best: Like any business, there are some things Michigan has or does better than others. They include our engineering expertise, higher education system, geographic location, automotive industry, medical expertise and natural resources. The best way to grow more good-paying jobs is for the state and its regions to focus more on starting, growing and attracting companies that utilize these assets and less on everything else.

Business Leaders for Michigan has identified key economic drivers, policies and actions necessary to become a top-10 state. Our Michigan Turnaround Plan outlines a roadmap to becoming a state that offers our families and children a place with plentiful jobs, rewarding careers and great quality of life.

There’s a growing optimism that Michigan has begun a genuine turnaround. Let’s resolve to set spending priorities on the things that matter most and concentrate on what we do best.

Stephen Henderson: CEOs like climate change in Snyder tax plan — the business climate, that is

“…all four of the CEOs supported a second crossing for the Detroit River into Canada. Krueger, in fact, called in a “no-brainer.”

BY STEPHEN HENDERSON
DETROIT FREE PRESS EDITORIAL PAGE EDITOR

Making Michigan more competitive in the national and global races for economic expansion projects was very much on the minds of four CEOs on a panel I moderated during Monday’s Business Leaders for Michigan summit in Lansing.

I got some pretty eye-opening answers to questions about Gov. Rick Snyder’s tax plan and about what makes other states and countries more attractive than Michigan for investment dollars.

Of the four CEOs, only one, Cynthia Pasky of Strategic Staffing Solutions in Detroit, said the governor’s tax reforms would result in a direct financial benefit for her company.
Domino’s Pizza CEO J. Patrick Doyle said state taxes actually could go up for his Ann Arbor-based company. Blake Krueger, CEO of Wolverine World Wide (Rockford-based maker of a diverse line of casual and work-related footwear) said his company’s taxes would certainly go up.

Charles (Chip) McClure of Troy-based Meritor (an axle company that supplies truck, bus and defense equipment manufacturers) said his company’s state taxes would be at best a wash but might go up.

Yet all four leaders also said they supported the Snyder tax changes.

Why?

Pasky said that beyond the potential bottom-line benefit to her business, the new scheme is the first to treat her the same as other companies. Her business was never going to be the “it” thing for which a governor might design incentives or tax credits, she said. And it isn’t big enough to attract singular attention from Lansing.

So doing away with most credits and incentives and instituting Snyder’s flat tax on profits actually puts Pasky’s business on a level playing field for the first time.

The other CEOs, though, said they supported the tax plan because it would help bring stability to the state, and predictability in business tax liabilities. And they all believed the break for smaller businesses would help make the overall business climate better, which in turn would help their businesses.

The CEOs’ reaction tracks with Snyder’s own description of his tax plan: that it was targeted toward small and mid-sized businesses, the companies that he sees as having the greatest potential to revitalize the state’s economy.

But it was fascinating to hear three CEOs of very big corporations say they supported the plan, even though it wouldn’t help their bottom lines.

I also asked the business leaders if there was one thing they were seeing in other states or countries that they wished we had here in Michigan.

Interestingly, not one of them said a word about lower taxes.

Doyle, of Domino’s, talked about the growth his company is experiencing in India. It’s being fueled, he said, by the rate and volume at which the country is producing college graduates with the right skill sets to help manage and grow the business.

He said Domino’s can just plug them right in, with no additional training.

Wolverine’s Krueger echoed that view and said there is a race for talent in every market, and that businesses will go where they can find it.

Both Krueger and Doyle said education was an obvious key to boosting that talent pool in Michigan.

McClure, of Meritor, told a story about a community in North Carolina, where his company was able to work with several municipalities in two different counties to consolidate its facilities; the result was less of a footprint but has resulted in more jobs for the entire region. It took a lot of cooperation to get everyone to see the advantages, he said.

Pasky, of Strategic Staffing Solutions, talked about the infrastructure advantage Michigan has with Detroit Metro Airport, but said that needs to be expanded to include better transit infrastructure in other areas.

Along those lines, all four of the CEOs supported a second crossing for the Detroit River into Canada. Krueger, in fact, called in a “no-brainer.”

Canada-U.S. border crossing ‘woefully insufficient’, Congress hears

The Vancouver Sun

By Sheldon Alberts, Washington Correspondent

WASHINGTON — Efforts to ease congestion at one of the busiest Canada-U.S. border crossings are being hampered by “woefully insufficient” American customs infrastructure and ill-considered budget cuts, a congressional panel heard Tuesday.

The problems at the Blue Water Bridge crossing, which links Sarnia, Ont., to Port Huron, Mich., are so acute that U.S. agents must conduct secondary inspections of commercial vehicles at off-site locations because the existing customs plaza lacks enough space to accommodate on-site searches.

“Delays are very common for U.S.-bound traffic, particularly during the busy summer months,” Stanley Korosec, vice-president of Blue Water Bridge Canada, said in prepared testimony before a House homeland security subcommittee.

“These delays have serious, adverse economic consequence of local, regional, national and international concern. Further, (they) negatively affect our shared environment, as hundreds of vehicles sit idling in long queues.”

The Blue Water Bridge is the second-busiest commercial truck crossing at the Canada-U.S. border, with about one-quarter of its traffic related to the auto industry. When passenger traffic is included, the Blue Water crossing is the third busiest. About 4.7 million vehicles crossed at the site in 2009.

While Canada has completed a planned expansion to its customs plaza on the Sarnia side, Korosec testified that plans to upgrade the U.S. customs facility have become bogged down in bureaucratic and budget delays.

“Currently, there is no place on the existing (port of entry) in which to unload and inspect the contents of a commercial vehicle; this at the second-busiest commercial crossing on the northern border,” said Korosec.

Blue Water Bridge Canada is a Crown corporation that operates the Canadian side of the bridge, while the Michigan Department of Transportation controls the U.S. side.

“We do the best with what we have,” Korosec said. “It is what we have that is the issue.”

The Blue Water Bridge became a travel choke-point in 2007, when officials recorded 151 days in which travellers experienced waits of more than one hour heading from Canada into the U.S. because of a Customs and Border Patrol staffing shortage.

Staffing on the U.S. side is no longer an issue, Korosec said, but existing infrastructure is “woefully insufficient” and continues to cause delays.

To unload a southbound commercial vehicle, U.S. customs and border patrol agents “are forced to escort the uninspected vehicle through the Port Huron community to an off-site inspection facility,” he said.

The procedure introduces “increased security risks” and results in “increased delays for legitimate shipments” of goods into the U.S., Korosec added.

Rep. Candice Miller, the Michigan Republican who chairs the House border and maritime security subcommittee, called the hearing as part of her broader effort turn Congress’s attention from problems along the U.S.-Mexico border to the Canada-U.S. frontier.

“The Canadians actually have done their plaza expansions on their side and the U.S. has not done plaza expansions on our side,” Miller said. “Much of the problems we are having in expediting (traffic) is obviously just not having enough capacity to accommodate what we need to accommodate.”

A $583-million U.S. project that would have added seven “primary inspection lanes” at the American customs plaza — and reduced average waiting times from about 30 minutes to three — has fallen victim to cost-cutting.

It has been replaced by a much less ambitious $110-million plan that fails to add enough capacity to eliminate delays, and yet has to be budgeted for by Washington.

The scaled-down plan does not properly connect the customs plaza to two major U.S. interstate highways — I-94 and I-65 — and leaves in place the aging customs plaza, Korosec said.

The funding problems on the American side highlight the challenges Canada and the U.S. will face as they try to negotiate a sweeping border security agreement.

A plan announced in February by Prime Minister Stephen Harper and President Barack Obama establishes “binational port of entry committees” to co-ordinate planning and funding of border infrastructure. Officials will also begin negotiating the feasibility of joint border facilities “within and beyond” Canada and the United States.